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TRANSCRIPT
MOTIVATIONS AND BEHAVIORS OF
SOLAR PV AND GEOTHERMAL SYSTEM
OWNERS IN NORTH CAROLINA
UNC Kenan-Flagler Business School | NC Sustainable Energy Association
List of Figures
Figure 1: Surveyed Solar PV (a) and Geothermal System Owners (b)……………………………………………………………. 3-4
List of Tables
Table 1: Motivating Factors behind the Decision to Install a Renewable Energy System…………………………………. 5
Table 2: Percentage of Respondents Very Satisfied or Somewhat Satisfied with Their Experience………..……….. 6
Table 3: Companies which Have Installed the Most Residential PV Solar Systems in NC…………………………………. 6
Table 4: Relative Degree of Ease or Difficulty with the Process………………………….……………………………………………. 7
Table 5: The Importance of Various Sources of Financing…………………………………….………..………………………..………. 9
Table 6: Adoption of Energy Efficient Technologies by Owners of PV Solar and
Geothermal Systems Relative to Time of Installation of the Renewable Energy System………………….……………. 10
Table 7: Adoption of Energy-Saving Behaviors by PV Solar (PV) and Geothermal (Geo)
Systems Relative to Time of Installation of the Renewable Energy System……………………………………………….….. 13
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
1
Motivations and Behaviors of Solar PV and Geothermal System Owners in
North Carolina
Executive Summary North Carolina has experienced significant growth in its clean energy markets. As of 2012, these state
industries accounted for over 18,591 full-time equivalent employees across 1,100 businesses accounting for
$3.7 billion in annual gross revenues.1 This growth is especially noteworthy in the solar industry. Total
registered capacity has increased from less than 1 megawatt (MW) in 2006 to 632 MW in 2012,2 which amounts
to an average annual growth rate of 1,243%. Powered by over 500 state businesses working in the solar space,3
this trajectory ranks North Carolina as the 3rd most active state in the nation in terms of new solar additions in
2013 Q3.4 Geothermal (ground-source) heat pumps have grown in popularity globally with annual increases of
approximately 10% in many areas.5 Growth in North Carolina’s renewable energy and energy efficiency sectors
is driven by many factors, including the falling price of installation, rising electricity prices, and the predictability
of state renewable energy incentives. The price of solar panels has fallen 60% since 2011,6 and it is expected
that, for the majority of electricity ratepayers, utility scale and commercial scale solar PV systems in North
Carolina will deliver at grid parity without any solar subsidies within the next five years.7 Residential scale solar
PV systems will deliver at grid parity around the year 2020.
In light of these trends, the purpose of this report is to assess the financial, personal, and policy drivers that
have influenced residential owners of solar PV and geothermal systems in North Carolina to make these
investments. In January 2012, the NC Sustainable Energy Association and the University of North Carolina at
Chapel Hill Kenan-Flagler Business School conducted a survey of 1,323 solar PV owners and 1,023 geothermal
system owners to assess the motivations behind their decision to purchase a renewable energy system,
challenges faced in the process, energy efficiency behaviors in which they engage, energy efficiency products
and design they have chosen, and characteristics of these consumers.
1 NC Sustainable Energy Association, "North Carolina Clean Energy Industries Census." December 2013.
2 State of North Carolina Utilities Commission, "Order Adopting Final Rules in the Matter of Rule Making Proceeding to
Implement Session Law 2007-397.Docket No. E-100, Sub 113." http://www.ncuc.commerce.state.nc.us/selorder/rules/SW022908.pdf. 3 NC Sustainable Energy Association, "North Carolina Clean Energy Industries Census." October 2012.
http://energync.org/assets/files/2012Census.pdf. 4 Cox, Charlotte. SNL, "Solar continues to shine in Q3'13 with 282 MW installed." Last modified October 14, 2013. Accessed
November 8, 2013. http://www.snl.com/InteractiveX/Article.aspx?cdid=A-25354226-13358. 5 Lund, J., B. Sanner, L. Rybach, R. Curtis, and G. Hellstroem, “Geothermal (Ground-Source) Heat Pumps: A World
Overview.” Geo-Heat Bulletin. September 2004. 6 Solar Energy Industries Association, "Solar Industry Data Q2 SMI Fact Sheet." http://www.seia.org/research-
resources/solar-industry-data. 7 Makhyoun, Miriam, Rich Crowley, and Paul Quinlan. NC Sustainable Energy Association, "Levelized Cost of Solar
Photovoltaics in North Carolina." http://energync.org/assets/files/LCOE of Solar PV in North Carolina-FINAL.pdf.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
2
Among other objectives, the results of this study can be used for the following:
To assess which policies and incentives are working and need to be reinforced,
To understand which incentives require greater education to enable their full effect,
To expand residential and commercial solar PV and geothermal adoption in North Carolina and other
states, and
To inform outreach messaging that encourages individuals to adopt energy efficient technologies and
energy-saving behaviors.
Key findings from this report include the following:
The most important consumer motivations for installing solar PV and geothermal system were, in order
of importance, federal and state tax credits, concern about the cost of electricity, concern about
environmental impacts, and a desire to do the right thing.
Renewable energy system owners reported high levels of satisfaction regarding their experience
obtaining the federal and state tax credit, the performance of their system, cost savings realized, and
the performance of the company that installed the system.
Owners of PV solar systems reported high levels of satisfaction with NC GreenPower.
For PV solar system owners, the easiest steps in the process were the installation process itself, finding
an installer, and securing project permits; for geothermal system owners, the easiest steps were
securing utility and project permits and finding information about renewable energy systems.
State and federal tax credits and the availability of cash were the most important sources of financing
reported by both PV solar and geothermal system owners.
For PV system owners, the most commonly installed energy efficient technologies are high-efficiency
lighting, Energy Star appliances, and attic insulation, with each having an adoption rate of over 85%.
For geothermal system owners, besides their energy efficient heating and cooling system, the most
commonly adopted technologies were Energy Star appliances, duct sealing and insulation, and attic
insulation.
The moment of installation of a renewable energy system, and immediately thereafter, emerged as the
critical windows for increased utilization of energy efficient technologies.
For PV system owners, the most common energy-saving behaviors are turning off lights when not in
use, washing a full load of dishes, and setting the thermostat to 78°F or higher in summer and 70°F or
lower in the winter. The most commonly adopted energy-saving behaviors by geothermal users were
washing a full load of dishes, moderating the temperature of the water heater, and turning off lights
when not in use.
Methodology Surveys were sent to 1,323 North Carolina residents who installed solar PV systems and 1,023 North Carolina
residents who installed geothermal energy systems based on data from the N.C. Utilities commission (for PV)
and from the Groundwater Protection Unit at N.C. Department of Environment and Natural Resources (for
geothermal) via U.S. mail or via email (if there was a valid email address on file). The survey inquired about the
motivations of system owners for installing a renewable energy system, experience with various components of
the installation process, and the importance of various forms of financing. Additionally, the surveys included
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
3
questions about whether system owners have also installed energy-saving technologies or engaged in energy-
saving behaviors. Finally, demographic data was collected in order to ascertain whether there are trends or
commonalities among NC residents who have chosen to install solar PV or geothermal systems.
The survey is available here.
Survey Results and Implications Responses were received from 760 solar PV owners (equivalent to a response rate of 57%) and from 453
geothermal system owners (equivalent to a response rate of 44%). [See Figure 1 for maps showing the
geographic distribution of residents surveyed.] This response rate is relatively high compared to that
documented in studies of average response rates (0.5-1.5%% for online surveys and 3-5% for paper surveys).8
Reasons for this may include that those who have installed a renewable energy system hold strong opinions
about this decision, that the survey did not require much time to complete, and that the organizations
conducting the survey are well respected by this population. Of solar PV respondents, the vast majority own
systems installed at their residence. Less than 15% of respondents indicated that the solar PV system was
located at a corporate, educational, government, or nonprofit location.
8 Resnick, Robert. “Comparison of postal and online surveys: Cost, speed, response rates, and reliability.” Working Paper.
Education Market Research, 2012. http://www.mchdata.com/wp-content/uploads/2012/10/Comparison_of_Postal_and_Online_Surveys.pdf.
Surveyed Residential Solar Photovoltaic Systems in North Carolina
June 2013
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
4
Figure 1: Surveyed Solar PV (a) and Geothermal System Owners (b)]
Motivating Factors
Solar PV and geothermal system owners responded slightly differently when asked about the importance that
various factors played in their decision to install a renewable energy system. These results are summarized in
Table 1.
These data show clearly that federal and state tax credits were important determinants in the purchase of a
renewable energy system. This is not surprising considering the high upfront cost of installing a renewable
energy system ($4.81/W for residential systems)9 and the relatively low cost of electricity for residential
customers in North Carolina (average cost of $0.10/ per kilowatt hour).10 Nevertheless, owners of geothermal
systems cited the cost of electric bills as overwhelmingly significant in their purchase decision.
For both PV and geothermal system owners, concern about the environment and a belief that installing a
renewable energy system was “the right thing to do” ranked highly, with between 85 and 92% of respondents
9Solar Energy Industries Association, "U.S. Solar Market Insight, Executive Summary." Last modified September 12, 2013. http://www.seia.org/research-resources/us-solar-market-insight.
10
U.S. Energy Information Administration, "North Carolina Electricity Profile 2010." Last modified January 30, 2012. http://www.eia.gov/electricity/state/NorthCarolina/.
Surveyed Residential Geothermal Systems in North Carolina
June 2013
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
5
indicating that this was either a very or somewhat important criterion. These responses indicate that, beyond
financial considerations, environmental stewardship and a sense of obligation are significant drivers behind the
adoption of renewable energy. This finding is consistent with previous research showing that a “conservation
ethic” or “the feeling of doing one’s share by reducing [energy] usage” was a significant motivator.11 While the
influence of neighbors in an individual’s decision to install a renewable energy system has been shown to be
significant in other studies (e.g., in California by Dastrop et al. 201012 and in the Greater Chicago Area by
Noonan et al. 201313), this factor was of relatively low importance among North Carolina renewable system
owners, perhaps because the relative density of installed systems in North Carolina is low.
Factors Motivating Solar PV System
Owners
Ra
nk*
% V
ery
Imp
ort
ant
% S
om
ew
hat
Imp
ort
ant
Factors Motivating Geothermal
System Owners
Ra
nk*
% V
ery
Imp
ort
ant
% S
om
ew
hat
Imp
ort
ant
Using tax credits 1 64.3 29.1 Cost of electric bills 1 74.1 22.9
Concern about environmental impact 2 68.0 23.8 Concern about environmental impact 2 48.5 37.6
It was the right thing to do 3 62.3 26.1 It was the right thing to do 3 47.6 37.1
Generating my own energy 4 56.2 30.9 Using tax credits 4 64.5 18.9
Cost of electric bills 5 37.2 44.4 Concern that the price of electricity is likely to rise in the future
5 41.7 38.2
Concern that the price of electricity is likely to rise in the future
6 27.5 44.1 Generating my own energy 6 19.5 23.1
Influence of a neighbor or friend 7 2.7 8.2 Influence of a neighbor or friend 7 5.5 13.5
Table 1: Motivating Factors behind the Decision to Install a Renewable Energy System *Rank was determined based on the percentage respondents replying that the factor was “very” or “somewhat” important.
Satisfaction of Renewable Energy System Owners
Owners of PV and geothermal systems reported high levels of satisfaction with similar items (Table 2). The
federal tax credit, performance of the system, and the company that installed the system ranked highest for
both PV and geothermal owners. Satisfaction with cost savings and the state tax credit was also high. The
positive reports of satisfaction with the federal and state tax credit complements the findings above that
showed these tax credits were a primary driver in the decision-making process. Additionally, the high level of
satisfaction with the company that installed the PV system reflects positively on this industry sector in North
Carolina. In total, 525 PV system owners reported having received installation services from 79 different
companies. The ten companies that installed the most systems are listed in Table 3. Nine companies were
reported as having installed systems at 10 locations or more; Southern Energy Management installed the
11
Niemeyer, Shirley. “Consumer Voices: Adoption of Residential Energy-Efficient Practices.” International Journal of Consumer Studies. 34(2). February 2010. 12
Samuel Dastrop, Joshua Graff Zivin, Dora L. Costa, and Matthew E. Kahn. “Understanding the Solar Home Price Premium: Electricity Generation and Green Social Status.” University of California Center for Energy and Environmental Economics. E3WP-001. December 2010. 13
Douglas Noonan, Lin-Han Chiang Hsieh, and Daniel Matisoff. “Spatial Effects in Energy-Efficient Residential HVAC Technology Adoption.” Environment and Behavior. Volume 45(4): 476-503. May 2013.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
6
greatest number of systems (108 or 21.2%). Twenty-nine (29) companies installed between 2 and 9 systems;
whereas, 40 companies installed only one. PV system owners also reported high levels of satisfaction with NC
GreenPower (53.5% “very satisfied” and 25.4% “somewhat satisfied”). NC GreenPower is a nonprofit
organization that disburses payments to owners of small solar-electric systems in the form of a subsidy of
$0.06/kWh, funded by voluntary donations from electricity consumers across the state.14 Geothermal system
owners are not offered a subsidy by NC GreenPower. This may explain why only 21% of respondents with
geothermal systems answered this question (which should have been marked as relevant only for solar PV
owners). However, 30% of geothermal owners who answered this question reported being very or somewhat
satisfied with NC GreenPower. Reported levels of dissatisfaction could result from geothermal system owners
feeling disappointed that they are not eligible for a subsidy like owners of solar, wind, small hydro, and biomass
systems are; alternatively, the low response rate may simply reflect that this question was not applicable to
geothermal system owners who may not even be aware of the subsidy offered to PV system owners.
Reported Levels of Satisfaction
by Solar PV Owners
Ra
nk*
% V
ery
Sati
sfie
d
% S
om
ew
hat
Sati
sfie
d Reported Levels of Satisfaction by
Geothermal System Owners
Ra
nk*
% V
ery
Sati
sfie
d
% S
om
ew
hat
Sati
sfie
d
Federal tax credit 1 74.9 20.0 Performance of your renewable energy system
1 76.8 19.3
Company that installed the system 2 78.4 15.6 Federal tax credit 2 77.8 15.6
Performance of your renewable energy system
3 62.5 30.8 Company that installed the system 3 65.3 26.8
State tax credit 4 61.4 28.0 Cost savings on your electric bill 4 58.4 32.5
Cost savings on your electric bill 5 34.8 44.2 State tax credit 5 60.6 24.3
Table 2: Percentage of Respondents Very Satisfied or Somewhat Satisfied with Their Experience *Rank was determined based on sum of % respondents replying that the factor was “very” or “somewhat” satisfied.
Company Name # of Systems Installed
Company Name # of Systems Installed
Southern Energy Management 108 First Light Solar 34
Sundance Power Systems 44 Alternative Energy Concepts 20
Strata Solar, LLC 41 Southeastern Energy Corporation 16
NC Solar Now 38 Cape Fear Solar Systems 10
Yes! Solar Solutions 36 Solar Tek of NC 9
Table 3: Companies which Have Installed the Most Residential PV Solar Systems in NC
14
U.S. Department of Energy, Interstate Renewable Energy Council, and NC Solar Center, "NC GreenPower Production Incentive." Last modified June 11, 2013. http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=NC05F. [N.B. This credit varies and has been declining.]
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
7
There was also a low response rate for the question concerning cash grants in lieu of a federal tax credit. (For
PV system owners: 23% response rate in comparison to a 99% response rate to the question about system
performance; for geothermal system owners, the comparable rates were 17% and 85%). The low response rate
to this question may partially reflect the fact that the cash grant was only available for systems for which
construction began between 2009 and December 31, 2011.15 Among survey respondents, 499 solar PV system
owners (70%) and 219 (52%) geothermal system owners had systems installed during this time period. These
data may indicate that the awareness among residential customers of incentives is limited because incentive
programs are introduced, change, and sunset more quickly than knowledge of them spreads.
Experience with the Process
The data concerning system owners’ experience with the installation process—from finding information about
renewable energy systems to finding an installer to obtaining financing and permits and including the
installation itself—are quite positive overall (Table 4).
Solar PV Owners’ Experience with
the Process
Ra
nk*
% V
ery
Eas
y
%
Som
ew
hat
Easy
Geothermal System Owners’
Experience with the Process
Ra
nk*
% V
ery
Eas
y
%
Som
ew
hat
Easy
The installation process 1 54.3 36.1 Securing utility permits 1 48.0 41.5
Finding an installer 2 49.8 37.9 Securing project permits 2 45.6 37.8
Securing project permits 3 48.6 34.5 Finding information about renewable energy systems
3 33.7 48.7
Finding information about renewable energy systems
4 36.6 45.1 Obtaining financing for the system 4 43.4 35.6
Obtaining financing for the system 5 44.4 36.0 Finding an installer 5 38.6 37.0
Securing utility permits 6 43.9 31.8 The installation process 6 29.9 40.4
Selling the renewable energy for a fair price
7 33.6 27.2 Not Applicable 7 -- --
Selling the REC for a fair price 8 28.6 31.6 Not Applicable 8 -- --
Table 4: Relative Degree of Ease or Difficulty with the Process *Rank was determined based on sum of % respondents replying that the factor was “very” or “somewhat” satisfied.
The installation process and finding an installer for solar PV systems were reported as relatively easy compared
to that for geothermal systems. In contrast, geothermal system owners reported the most ease with securing
the required permits. With 82% and 83% of solar PV and geothermal system owners replying that finding
information about renewable energy systems was either “very” or “somewhat” easy, one can conclude that
improvements in the accessibility of information would be of benefit to individuals considering installing a
system. Improvement to the process of securing utility permits for those installing PV solar systems should also
15
U.S. Department of Treasury, "Payments for Specified Energy Property in Lieu of Tax Credits under the American Recovery and Reinvestment Act of 2009: Frequently Asked Questions and Answers, Begun Construction." http://www.treasury.gov/initiatives/recovery/Documents/FAQs for Begun Construction web4.pdf.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
8
be considered as 76% of respondents reported that this step was either “very” or “somewhat” easy. This
statement and the preceding comment about access to information should be taken within context—while
there is room for improvement, data showing that >75% of respondents found information and secured
permits without difficulty are generally positive. However, it would be more informative to consider differences
in responses by county because North Carolina counties charge different fees. It is also interesting to note that
the installation of geothermal systems was generally regarded as easy by a clear majority of respondents. This
may be surprising to some because the process of installing a geothermal system involves heavy equipment and
disturbance to a property’s landscape. A mitigating factor may have been that it is common to install a
geothermal system when a house is built, so the owner in these cases would not have been living at the
property at the time of the install.
The lowest level of ease was reported for the process of selling the renewable energy or the renewable energy
certificate (REC) for a fair price (only 61% of solar PV owners said this was “very” or “somewhat” easy).
However, it is unclear whether the trouble lies in actually selling the energy or the REC or whether the
dissatisfaction is a result of the system owners thinking that the price itself is unfair. To disentangle these
factors, it would be instructive to monitor whether customer satisfaction with this step of the process changes
as the price changes or whether the level of dissatisfaction remains the same. If the latter were true, it would
indicate the selling process is more difficult.
Sources of Financing
Data regarding the sources of finances used to purchase and install a solar energy system are shown in Table 5.
The most commonly used sources of financing were the federal tax credits and state tax credits. Federal tax
credits were regarded as either “very “ or “somewhat” important by 96.5% of PV solar respondents and 95.4%
of geothermal respondents. Similarly, state tax credits were regarded as either “very “ or “somewhat”
important by 95.3% of solar PV system owners and 92.7% of geothermal system owners. Ninety-four (94.0%) of
solar PV respondents and 93.2% of geothermal respondents indicated that the availability of cash on hand was
either “very” or “somewhat” important. The high percentage of respondents indicating that the availability of
cash on hand was either “very” or “somewhat” important underscores the importance of programs that help
offset the upfront cost of installing a renewable energy system for people who do not have large reserves of
cash savings. Additionally, these data show the significant role that tax credits play in providing a source of
funding and, importantly, that these tax credits are as important as the availability of cash on hand.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
9
Source of Financing for Solar PV
System Owners
Ra
nk*
% V
ery
imp
ort
ant
% S
om
ew
hat
Imp
ort
ant Source of Financing
forGeothermal System Owners
Ra
nk*
% V
ery
Imp
ort
ant
% S
om
ew
hat
Im
po
rtan
t
Federal tax credit 1 82.0 14.5 Federal tax credit 1 84.3 11.1
State tax credit 2 78.5 16.8 Availability of cash on hand 2 81.0 12.2
Availability of cash on hand 3 76.2 17.8 State tax credit 3 80.5 12.2
NC GreenPower 4 56.1 25.5 Availability of loan 4 58.2 16.3
Availability of loan 5 45.7 31.0 Incentives from the utility company 5 21.2 26.0
Incentives from the utility company 6 40.0 31.2 NC Green power 6 9.6 13.5
Cash grant in lieu of federal tax credit 7 20.1 9.7 Cash grant in lieu of federal tax credit 7 6.7 2.2
Grant 8 22.8 3.3 Grant 8 3.8 .00
Table 5: The Importance of Various Sources of Financing
*Rank was determined based on sum of % respondents replying that the factor was “very” or “somewhat” important.
A potential solar PV owner’s inability to pay the upfront capital cost for a solar PV system is a common financial
barrier for consumers, however, alternative business financing programs would allow consumers to eliminate
the upfront costs and increase solar PV adoption in neighborhoods that are less affluent and with younger
families.16 Industries selling comparably priced products, such as new cars and trucks, enable consumers to
overcome the upfront capital cost barrier through the offering of monthly financing options not currently
available to potential solar PV system owners. North Carolina’s state energy policy does not allow solar PV
system retailers to own and operate a solar PV system on a residential customer’s property and enter a
contract with that customer to sell only the solar power to the customer, but this kind of a program would
attract a new demographic of customers because of the low upfront capital costs and immediate savings. We
would intuitively surmise that this legal limitation of retail financing options precludes the average median
North Carolina household from being able to access the solar PV market. Additionally, although incentives from
utility companies were ranked sixth in importance for solar system owners, these incentives were critical to the
financing of fully 75% of PV system owners. Relatively few respondents indicated that a cash grant in lieu of a
federal tax credit was an important source of financing, which aligns with the results reported above which
indicated a lack of awareness of this incentive program.
Utilization of Energy Efficient Technologies
The survey also inquired whether renewable energy system owners utilized energy efficiency technologies in
their homes. The results of these questions are presented in Table 6 for both solar PV and geothermal system
owners. These data provide quantitative support for what one might consider intuitive—that is, individuals
who install renewable energy systems are also very likely to utilize available technology, whether high- or low-
tech, to reduce the amount of energy consumed.
16
Easan Drury, Mackay Miller, Charles M. Macal, Diane J. Graziano, Donna Heimiller, Jonathan Ozik, Thomas D. Perry IV. “The transformation of southern California’s residential photovoltaics market through third-party ownership.” Energy Policy. Volume 42: 681-690. March 2012.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
10
Solar PV System Owners’ Utilization
of Energy Efficient Technologies
Geothermal System Owners’ Utilization
of Energy Efficient Technologies
Tota
l in
stal
led
at
any
tim
e (%
)
Nev
er c
on
sid
ered
(%
)
Co
nsi
der
ed b
ut
did
no
t
inst
all (
%)
Inst
alle
d p
rio
r to
PV
Syst
em
(%)
Inst
alle
d a
t th
e sa
me
tim
e as
PV
Sys
tem
(%
)
Inst
alle
d a
fter
PV
Syst
em
(%
)
Tota
l in
stal
led
at
any
tim
e (%
)
Nev
er c
on
sid
ered
(%
)
Co
nsi
der
ed b
ut
did
no
t
stal
l (%
)
Inst
alle
d p
rio
r to
Geo
ther
mal
Sys
tem
(%)
Inst
alle
d a
t th
e sa
me
tim
e as
Geo
ther
mal
Syst
em
(%
) In
stal
led
aft
er
Geo
ther
mal
Sys
tem
(%)
High-Efficiency
Lighting (CFLs or LEDs)
93 3.2 4.5 67.1 16.5 8.7 Energy Star
Appliances 93.2 3.7 3.1 46.9 37.7 8.6
Energy Star Appliances
91 3.1 5.4 72.1 15.0 4.4 High-Efficiency
Heating System 93.1 4.4 2.5 10.6 81.6 0.9
Attic Insulation 87 5.3 7.8 62.9 18.7 5.2 High-Efficiency
Cooling System 92.8 4.4 2.8 10.4 81.1 1.3
High-Efficiency Heating System
77 9.5 13.0 52.6 16.9 8.0 Duct Sealing and Insulation
91.3 4.9 3.8 21.3 66.9 3.0
High-Efficiency Cooling System
76 9.9 13.4 51.3 16.3 9.1 Attic Insulation
88.9 4.1 7.0 43.5 40.3 5.1
Duct Sealing and
Insulation 75 11.1 13.5 55.2 1.2 4.0
Programmable Thermostat
88.3 3.6 8.2 22.7 61.0 4.6
Programmable
Thermostat 74 9.1 17.2 52.2 15.5 6.0
High-Efficiency Lighting (CFLs or LEDs)
84.4 7.2 8.5 43.2 26.8 14.3
Air Sealing 72 16.1 2.73 47.9 18.5 4.8 Air Sealing 79.4 10.9 9.7 31.2 42.7 5.5
Low Emissivity
Window
Treatments
62 23.1 14.5 46.3 13.4 2.7 Low Emissivity Window Treatments
70.0 18.7 11.4 32.9 33.5 3.5
Slab-Edge Insulation
35 55.7 9.7 19.6 12.8 2.2 Slab-Edge
Insulation 42.6 52.8 4.7 10.6 29.8 2.1
Table 6. Adoption of Energy Efficient Technologies by Owners of PV Solar and Geothermal Systems Relative to Time of
Installation of the Renewable Energy System
Survey responses indicate that with the exception of installing slab-edge insulation, over 60% of respondents
had installed the energy efficient technologies about which the survey inquired. For PV system owners, the
most commonly installed technologies are high-efficiency lighting, Energy Star appliances, and attic insulation,
with each having an adoption rate of over 85%. Most commonly, these technologies were installed prior to the
solar PV system. For geothermal system owners, besides their energy efficient heating and cooling system, the
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
11
most commonly adopted technologies were Energy Star appliances, duct sealing and insulation, and attic
insulation. In contrast to PV system owners, geothermal system owners more often reported installing these
technologies at the same time as the geothermal system.
The least commonly adopted technologies were slab-edge insulation and low emissivity window treatments.
Interestingly, only 84% of geothermal system owners reported having installed high-efficiency lighting despite
97% and 86% having responded that the cost of electric bills and concern about environmental impact were
very or somewhat important motivating factors. The low adoption rate of slab edge insulation likely reflects
the fact that this must be done during the construction of the home and so would not have been an option for
many respondents.
Interestingly, an average of 16% of responders installed energy saving technology at the same time as installing
their solar energy system, and very few respondents indicated installing an energy efficient technology after
the installation of their renewable energy system. This indicates that the time a system is being installed is a
favorable time to increase the number of energy-saving technologies utilized. Supporters of energy efficiency
would thus do well to ensure effective outreach during this critical timeframe. This conclusion is supported by
the meta-analysis of Guerin et al. which examined 25 years of energy studies and showed increased adoption of
energy-saving technologies in response to an incentive or energy audit.17 One of the studies included in the
Guerin et al. paper reported that 50% of participants in an energy audit made specific efficiency improvements
in their homes after the program; another showed that participation in an energy audit reduced household
energy consumption 2.5% more than was reduced by households where an energy audit was not conducted.18
Adoption of technologies that promote energy efficiency has the potential to play a significant role in reducing
consumption of electricity. The large scale of this opportunity is evident in data showing that, among
developed countries, the United States has one of the highest ratios of energy consumption to GDP.19 The
National Academy of Science estimates that adoption of energy-saving technology would reduce by 30% the
predicted energy consumption in 2030.20 A 2009 survey by the National Academies showed that among South
Atlantic States North and South Carolina (data is not available for NC alone) have the highest household energy
consumption and second highest household energy expenditure per square foot.21 Furthermore, with its
average electricity price 25th lowest in the nation,22 North Carolina was ranked 26th out of the 50 states and DC
for its adoption and implementation of energy-efficiency policies by American Council for an Energy Efficient
17
Guerin, D.A., Yust, B.L. & Coopet, J.G. “Participants Predictors of Household Energy Behavior and Consumption Change as Found in Energy Studies Since 1975.” Family and Consumer Sciences Research Journal. 29 (1):48–80. July 2000. 18
Ibid. 19
America’s Energy Future Energy Efficiency Technologies Subcommittee; National Academy of Science; National Academy of Engineering; National Research Council. “Real Prospects for Energy Efficiency in the United States (Report in Brief).” The National Academies Press. Washington DC, 2010. http://books.nap.edu/catalog.php?record_id=12621. 20
America's Energy Future Energy Efficiency Technologies Subcommittee; National Academy of Sciences; National Academy of Engineering; National Research Council. “Real Prospects for Energy Efficiency in the United States (Free Summary).” The National Academies Press Washington, D.C., 2010. http://books.nap.edu/catalog.php?record_id=12621. 21
U.S. Energy Information Administration, "2009 Residential Energy Consumption Survey: CE1.4. Summary Totals and Intensity, South Homes." Last modified December 14, 2012. http://www.eia.gov/consumption/residential/data/2009/index.cfm?view=consumption 22
Institute for Energy Research, "North Carolina: An Energy and Economic Analysis." Last modified August 01, 2013. http://www.instituteforenergyresearch.org/2013/08/01/north-carolina-an-energy-and-economic-analysis/.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
12
Economy in its 2009 State Energy Efficiency Scorecard.23 A study by Duke University and Georgia Institute of
Technology demonstrated that improved policies such as incentives for appliances and weatherization could
reduce North Carolina’s projected residential energy consumption by approximately 10% in 2020 and 16% in
2030, resulting in a savings estimated at $320 per household.24 Additionally, a report by NC DENR’s Energy
Efficiency Workgroup demonstrates that the increased adoption of energy efficiency measures can stimulate
job growth, foster economic development, and promote domestic energy security.25 These data underscore
the potential for residents of North Carolina to save energy and money by adopting energy efficient
technologies and energy-saving behaviors and the need for policies that incentivize this behavior.
The survey also inquired whether system owners engaged in particular energy-saving behaviors. These results
are presented in Table 7. The data show that solar PV system owners are more likely than geothermal system
owners to engage in energy-saving behaviors. For solar PV system owners, the most common energy-saving
behaviors are turning off lights when not in use, washing a full load of dishes, and setting the thermostat to
78°F or higher in summer and 70°F or lower in the winter. In contrast, because geothermal systems provide
such an energy efficient means of heating and cooling, geothermal system owners were much less likely to
adjust their thermostats to more moderate levels. This fact may also explain why 20% of geothermal system
owners report using a ceiling fan rarely or only sometimes, as compared to less than 10% of solar PV system
owners. The most commonly adopted energy-saving behaviors by geothermal users were washing a full load of
dishes, moderating the temperature of the water heater, and turning off lights when not in use.
23
American Council for an Energy-Efficient Economy, "The 2009 State Energy Efficiency Scorecard." Last modified October 01, 2009. http://aceee.org/research-report/e097.
24
Brown, Marilyn, Joy Wang, Matt Cox, Youngsun Baek, Rodrigo Cortes, Benjamin Deitchman, Elizabeth Noll, Yu Wang, Etan Gumerman, and Xiaojing Sun. Georgia Institute of Technology School of Public Policy and Duke University Nicholas Institute for Environmental Policy Solutions, "Energy Efficiency in the South: State profiles of Energy Efficiency Opportunities in North Carolina." Last modified April 13, 2010. http://www.nicholas.duke.edu/instituteold/climate/seclimate/EE in the South -North Carolina.pdf. 25
North Carolina Department of Environment and Natural Resources, "Policy Suggestions to Address Barriers to Energy Efficiency Summary Report." Last modified October 19, 2010. http://www.energync.net/Portals/14/Documents/EnergyPolicyCouncil/11-05-2010_EnergyEfficencyDraftPolicyOptions.pdf.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
13
Energy-Saving Behaviors Adopted by Solar PV System Owners
Energy-Saving Behaviors Adopted by Geo. System Owners
Reg
ula
rly
(%)
Oft
en (
%)
Som
etim
es
(%)
Rar
ely
(%)
Reg
ula
rly
(%)
Oft
en (
%)
Som
etim
es
(%)
Rar
ely
(%)
Turn off lights when not using them 87.1 11.4 1.6 0.0 Wash a full load of dishes 84.4 12.1 2.7 0.7
Wash a full load of dishes 87.3 9.2 2.6 0.8 Set water heater to “normal” (140°F) or “low” (120°F)
80.6 9.6 2.8 7.1
Set water heater to “normal” (140°F) or “low” (120°F)
85.0 7.4 3.7 4.0 Turn off lights when not using them 80.2 17.4 2.4 0.0
Use ceiling fans 71.8 13.3 9.0 5.9 Regularly check filters in heating and cooling equipment for changing
71.2 21.5 7.0 0.2
Set thermostat to 78°F or higher in summer and 70°F or lower in the winter
70.7 13.5 10.4 5.4 Use ceiling fans 63.3 17.1 11.8 7.8
Regularly check filters in heating and cooling equipment for changing
70.6 22.0 6.1 1.3 Set thermostat to 78°F or higher in summer and 70°F or lower in the winter
57.3 15.1 13.6 14.1
Wash clothes in “cold” (not “warm” or “hot”) water
55.9 20.6 16.1 7.4 Wash clothes in “cold” (not “warm” or “hot”) water
47.5 24.8 20.8 6.9
Table 7. Adoption of Energy-Saving Behaviors by PV Solar (PV) and Geothermal (Geo) Systems Relative to Time of
Installation of the Renewable Energy System
It is interesting to note that practice of washing laundry in cold water is the least commonly adopted behavior
inquired about in the survey. However, up to 85% of the energy used to wash clothes is expended to heat the
water, and washing clothes in cold water can save an average of $63/year as compared to washing in warm
water.26 These data suggest that while an economic case can be made for making the switch from hot or warm
water to cold water washing, other factors, such as a belief that warmer water is required to properly clean
clothes, can act as a barrier to one’s adoption of this behavior even if that individual is likely to adopt many
other energy-saving behaviors. Similar to the untapped potential to save electricity and money with energy
efficient technologies, behavior changes can also save energy and money. While a financial barrier may
prevent some home owners from purchasing energy-efficient technology, the adoption of energy-saving
behavior can be restricted by a lack of information, a limited awareness of the benefits of saving energy,
preconceptions about the negative trade-offs of energy-saving behaviors, and behavioral inertia.27
26
Ottman, Jacquelyn A., Edwin R. Stafford, and Cathy L. Hartman. “Avoiding Green Marketing Myopia: Ways to Improve Consumer Appeal for Environmentally Preferable Products” Environment: Science and Policy for Sustainable Development. 48(5): 21-36. June 2006. 27
Jaffe, Adam and Robert Stavins. “The Energy-Efficiency Gap.” Energy Policy. 22(10): 804-810. 1994.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
14
Demographics of Renewable Energy System Owners in North Carolina The responses to the optional questions about demographics help paint a picture of the renewable energy
system owner in North Carolina.
Solar PV System Owners
For solar PV systems, the median age range for a system owner is 55-60. The median income range is
$100,000-149,999. However, there are 193 missing responses (26% of the population). This is significant
enough to create a non-response bias to this question; however, even if all non-respondents were in the lowest
earning income level (under $15,000 per year), which is unlikely, the median income would still fall in the
$75,000-$100,000 range—well above the median household income of the state ($41,550).28 Among solar
system owners, 56% have post-graduate degrees, while 88% of system owners graduated from a four-year
institution. Regarding the racial mix of PV system owners, 95% of system owners who responded to the survey
indicated they were white; whereas 1.5% indicated their race as Asian; 1.37% African-American; 1.07%
Hispanic; 0.45% Native American; 0.45% “other single race;” and 2.76% were listed as living in a household with
2 or more races. Forty-two (42) respondents indicated that their solar system was located on leased property;
of these, 40 indicated that they were the property owner. This corresponds to what we would intuitively
surmise—that the land owner, not the lessee would install a renewable energy system.
Geothermal System Owners
For geothermal system owners, the median age is 55-60 and the median income is $150,000-$199,999. Of
geothermal system owners, 49% have post-graduate degrees, while 78% of system owners graduated from a
four-year institution. Compared to PV solar system owners, the income range is higher but the education levels
achieved are slightly lower. Regarding the racial mix of geothermal system owners, 97% of system owners who
responded to the question about race indicated they were white; whereas 1 system owner indicated their race
as Asian; 3 system owners identified as Hispanic; and 8 responded “two or more races.” Three (3) geothermal
system owners indicated the system was on leased land; and each of these respondents indicated that they
were the property owner.
Conclusions This survey provides instructive insight into the motivations and behaviors of North Carolina residents who
have installed solar PV or geothermal systems. Survey results indicate that financial considerations and
incentives, such as federal and state tax credits, are among the most important drivers in individuals’ decisions
to install a renewable energy system. It is noteworthy that the state and federal tax credits sunset at the end of
2015 and 2016, respectively. An abrupt removal of these incentives could undermine the growth of the solar
and geothermal sectors, putting job creation and economic and environmental benefits at risk. A majority of
residential North Carolina households lack sufficient tax liability to utilize tax incentives for five consecutive
years as a means to overcome the upfront capital cost barrier to using a solar PV system on their property.
It could be inferred from these survey results that current state energy policies in North Carolina do not
provide a diversity of financing methods and, as seen in other states, this diversity would allow households at
28
U.S. Census Bureau, "State Median Income." Last modified September 19, 2013. Accessed November 12, 2013. http://www.census.gov/hhes/www/income/data/statemedian/. Reported median is single-year estimate in current dollars for 2012.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
15
lower to middle income levels to also participate in the state's growing solar PV market. Policy makers should
carefully consider how to bridge the gap between the sunsetting of these credits and the time required for
solar PV and geothermal energy to reach grid parity and/or to compete on a more level playing field with
traditional energy fuels and technologies.
There were a number of positive lessons for the renewable sector in North Carolina. First, renewable energy
system owners hold a very favorable perception of the process they went through to install their system,
including satisfaction with the incentive programs and with the installation companies. Additionally, no obvious
points of significant difficulty emerged in responses to questions about the process from learning about options
through the installation process and the selling of the renewable energy. A clear majority of renewable energy
system owners had already installed energy efficient technologies before or at the same time as installing the
system. System owners were also highly likely to engage in energy-saving behaviors, although a few
opportunities for increased adoption were evident. Finally, the demographic data collected indicate that the
majority of solar PV and geothermal system owners are white, wealthy, and highly educated, indicating that
there is a significant opportunity to expand the market for renewable energy systems to a greater diversity of
North Carolina residents.
Motivations and Behaviors of Solar PV and Geothermal System Owners in North Carolina
16
About the Authors Carol A. Hee is Assistant Clinical Professor of Strategy and Entrepreneurship at the University of North Carolina
at Chapel Hill’s Kenan-Flagler Business School and Director of the Center for Sustainable Enterprise.
Christopher Wedding is Assistant Adjunct Professor of Strategy and Entrepreneurship at the University of North
Carolina at Chapel Hill’s Kenan-Flagler Business School and is Director of Research and Development and
Sustainability at Cherokee.
Ivan Urlaub (corresponding author) is Executive Director of the North Carolina Sustainable Energy Association.
[email protected] | http://www.energync.org | (919) 832-7601
This project was supported by a grant from the NC Sustainable Energy Association (NCSEA). Kacey Hoover, Ivan
Urlaub, Jerry Carey and Miriam Makhyoun of the NCSEA team provided tremendous support in the crafting and
distribution of the survey, data entry, and editing. Michael Shore formerly of FLS Energy, Phil Nyborg of ENlight
Solar and Ralph Thompson of Holocene provided additional industry input. Dr. Shay Fatal, UNC, assisted with
statistical analysis; and Zachery Mercer Brown, UNC student, served as a research assistant.